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DANCERS EXPENSES AND DEDUCTIONS

Once you become a client of Bambridge Accountants, the first thing that we will look at is ensuring that you are claiming absolutely every expense you are eligible to as an dancers.

DANCERS HAVE A NUMBER OF TAX DEDUCTIONS THAT ARE UNIQUE TO ANY OTHER INDUSTRY.

Below we have put together a list of some of the expense you are entitled to as an dancers.

CLOTHING

Clothing is an extremely useful expense for dancers to claim on your tax return. Almost all dancers spend some of their income on work-related clothing, whether it be clothing for auditions, shoots or rehearsals.

Clothing is one of the more known expenses to claim. However for a smooth and pain-free tax-filing season, it is essential that you are aware of your entitlements when claiming this expense. Many dancers are subject to penalties and hold-backs due to over claiming.

USE OF HOME AS AN OFFICE

Use of home as an office is an expense that often missed out by dancers. If you use your home to apply for auditions, rehearse or any other work-related uses you are entitled to claim this expense.

You are able to claim a percentage of your household bills for your use of home as an office.

ADVERTISING

Getting your name seen and heard is a major part of being a successful dancer. Anyways you promote yourself in an effort to get ahead in your acting career is claimable. Whether you pay to be mentioned in an article or directory, run an ad campaign on your dance blog or any other forms of promotion- it's claimable.

Expenses and Deductions for Actors

OUR EXPERT CREATIVE INDUSTRY TAX KNOWLEDGE CANNOT BE BEATEN.

Actors and taxes can be an extremely complex mix. We specialise in understanding tax for acting professionals, providing the best insight on special tax rules and exemptions that apply to individual actors, groups of performers and companies.

With over 10 years experience working with thousands of actors tax matters, we are truly expert in your field. We offer friendly, easy-to-understand advice and support that cannot be beaten.

Expenses and deductions for actors

One of the first steps that we take when working with individuals or companies in the acting profession is looking at their accounts to ensure that absolutely every claimable expense is being claimed.

Know what expenses you are (and are not) entitled to can save you thousands. Below is a breakdown of just some of the expenses and deductions you are entitled to as an actor.

Clothing

Clothing can be an extremely useful claimable expense. Almost all actors some of their income on work-related clothing, whether it be clothing for auditions, shoots or rehearsals.

Clothing is often an obvious expenses to claim. However for a pain tax-filing season every year, it is vital that you are aware of your entitlements when claiming this expense. All to often actors are subject to penalties and hold-backs due to over claiming.

USE OF HOME AS AN OFFICE

Use of home as an office is an expense often overlooked by actors. Using your home to apply for auditions, rehearse a script or any other work-related practices can lead all expenses related to be claimable. This includes a percentage of your household bills for your use of home as an office.

ADVERTISING

Getting seen and heard is a key component to a successful acting career. Any methods you use to promote yourself in an effort to get ahead in your acting career is claimable. Whether it’s paying to be mentioned in an article or directory, running an ad campaign on your acting blog or any other forms of promotion- it's claimable.

Trump set for largest rise in Dow Jones since first year of a post-war presidency

The Dow index broke through the 25,000 barrier at the beginning of 2018 and has since continued to rise past 26,000. With the year anniversary of Tump’s inauguration tomorrow, Dow has risen more than 33% since Trump took office.

Excluding president Trump, the average Republican president has seen a loss of 1.3% in their first year compared to a 13% rise for Democratic presidents. However, it could become more difficult for Trump if inflation and interest rates rise or quantitative easing is withdrawn.

Trump quickly moved to cut regulations enacted by previous administrations. He successfully pushed to overhaul the U.S. tax code, which included slashing the corporate tax rate to 21% from 35%.

Some investors have expressed beliefs that Trump has received too much credit for the improvements and the run-up really speaks for the global economy boosting industrial stocks.

US TAX Q&A: IMMIGRATING TO THE US FROM THE UK

CLIENT QUESTION:

“I am looking for a US/UK tax advisor to file my husband and I’s personal income tax accounts for 2017. A little background information - and some questions! We are both UK citizens. I am employed (to April 2018) and PAYE. My husband is self-employed and has already filed his UK tax return for 2016-2017. We were approved to immigrate to the USA under EB1A in December 2017, and entered the USA to complete processing (and to house hunt) on 20 December 2017. We stayed for two weeks, returning to the UK (via Mexico) on 10 January 2018. We plan to immigrate permanently (to California) on 3 May 2018. My questions then, are: 1. Should we file personal income tax assessments for 2017 in the USA (or wait until April 2019?) 2. Can you file these on our behalf; and 3. How much do you charge? I do not expect that we will have any tax to pay but I would like to be careful about being on the right side of the law, green card-wise. ”

— Bambridge Accountants Client

OUR ANSWER:

2017 TAX YEAR

You will not have to file any US returns for the 2017 tax year. You should file US taxes in April 2019 for all worldwide income earned in 2018. This includes any income you earned January-April 2018 while you lived in the UK. You will be able to claim a tax credit for the amount of tax you paid on this 2018 UK income on your US return to avoid be taxed twice.

FUTURE INCOME

For any UK income in future years (i.e. interest, dividends, or capital gains and rental income from real estate), you must pay UK tax. Again, this income should be reported on your US return and then you may take the credit for the amount of tax paid.

P85

Be sure to fill out form P85 and send it to HMRC before you depart the UK. This will let them know that you are leaving the country. Additionally do not forget to include your income from 5 April 2018-3 May 2018, as it must be include on your 2018-2019 return.

EXTENSION

When filing your US return in 2019, you automatically get a 2 month extension until 15 June to allow time to gather any UK tax documents you may need. If this is not enough time, make sure to file for an another extension before 15 June. This will give you until 15 October to submit your US tax return.

CALIFORNIA

In California, you will owe state tax in addition to federal (US) tax. This tax is quite high, with the maximum rate being 12.3% for the top income bracket. However, you may deduct this tax payment from your gross income on your federal return.

ITEMISED DEDUCTIONS

-Decide if you want to itemize your deductions (figure out which expenses during the year are deductible from gross income) or take the standard deduction (a flat, simple reduction of GI based on filing status). Be sure to do this at both the federal and state levels and figure out which option will leave you with the lowest adjusted gross income (AGI).

US CITIZENS WITH UK INVESTMENTS- FAQ

Photography by Campbell Addy for Selfridges

Q: DO I HAVE TO PAY TAX ON CAPITAL GAINS FROM UK INVESTMENTS?

A: Yes, all UK investments are subject to UK capital gains tax. The tax rate is 20% (or 28% for residential property) if you are a higher rate taxpayer, and 10% (or 18% for residential property) if you are a basic rate taxpayer.

Q: AM I PERMITTED TO TAKE THE UK ANNUAL EXEMPT ALLOWANCE (AEA) WHEN CALCULATING TAXABLE CAPITAL GAINS?

A: Yes, capital gains from investments are only taxable in excess of the AEA. The 2017 AEA was £11,500, so individuals with capital gains in the UK will pay tax on their net capital gain less the AEA.

Q: WHAT HAPPENS IF MY INVESTMENT RESULTED IN A LOSS FOR THE TAXABLE YEAR?

A: As in the US, capital losses are only deductible against capital gains. If the total amount of gains is greater than total losses, the amount of the loss can be subtracted from other capital gains to reduce net capital gain. If all investments produce a net capital loss, that loss can be carried forward and deducted from capital gains in future years. (Note: A net capital loss from UK investments cannot be deducted from US capital gains.)

Q: HOW CAN I PAY THIS TAX?

A: HM Revenues & Customs provides a Capital Gains Tax calculator for non-residents that you can use to calculate how much you owe and pay the tax.

Q: WHAT IF I RECEIVED INTEREST OR DIVIDENDS FROM UK INVESTMENTS?

A: You will pay UK taxes on this investment income, subject to a threshold. The rate for this tax varies depending on which income band you fall in. Use this guide to figure out how much investment income tax you owe.

Q: WHAT IF I OWN REAL PROPERTY IN THE UK? HOW IS MY RENTAL INCOME FROM THAT INVESTMENT TAXED?

A: The UK automatically withholds their share of UK tax when rental income is paid to the non-resident landlord. If you wish to receive these payments without having to pay UK tax, you can apply here (the income is still subject to US tax).

Q: SHOULD I STILL REPORT INCOME FROM UK INVESTMENTS ON MY US TAX RETURN? CAN I DEDUCT ANY OF THESE TAX PAYMENTS FROM MY US TAXABLE INCOME?

A: Yes, you still must report this income on your US tax return. However, in order to prevent this income from being taxed twice, the IRS allows taxpayers to either take a deduction or a credit for any foreign taxes paid during the year. This includes the investment income, capital gains, and rental income taxes mentioned above. In most cases, it will be more beneficial for individuals to take the credit, as it is a direct reduction in tax liability rather than a deduction from taxable income. Use Form 1116 to take this credit.

Q: DO THESE RULES APPLY TO ALL TYPES OF INVESTMENTS?

A: No, the foreign tax credit does not apply to taxes on excluded income, foreign mineral income, and a portion of taxes on oil and gas income. The IRS outlines more taxes that do not qualify here.

Q: WHAT IF I AM INVESTED IN A MUTUAL FUND BASED IN THE UK?

A: International mutual funds are treated as Passive Foreign Investment Companies (PFIC) if 75% of their revenue is “passive” and 50% of the company’s assets are used to generate revenue. US taxpayers who receive interest, dividends, or capital gains from PFICs must report this income as ordinary income on their US tax return, which is taxed at a higher rate than normal capital gains. They are not subject to UK taxation. This law was designed to bring tax revenue back to the US and disincentivise foreign investment.

Q: ARE THERE ANY TIMING DIFFERENCES FOR FILING A RETURN IN THE US VERSUS THE UK?

A: The US taxable year runs from January 1 to December 31, while the UK tax year is from April 6 to April 5. Due to this difference, individuals paying taxes in both countries get an automatic 2-month extension on their US return, meaning it is due June 15 rather than April 15. If necessary, taxpayers may apply for an additional extension which would give them until October 15 to file a return for the previous year.

Q: WHAT OTHER GENERAL RULES SHOULD I KNOW ABOUT INVESTING AND PAYING TAXES IN THE UK?

A: UK taxes must be paid in pounds; US paid in dollars. Necessary currency conversions can use an annual average of the exchange rate or the rate on the day of each transaction. The taxpayer may use whatever conversion method they like as long as it is consistent throughout.

PROPOSED TAX CHANGES AND IMPACT ON AMERICANS LIVING ABROAD

US Expats are unique when it comes to taxes. There are a number of unique expenses, deductions and reliefs that are available to US Expats. We specialise in providing a tailored US Tax service that focuses on minimising tax owed and maximising on the US tax incentives and reliefs available.

SAVING US EXPATS MONEY FOR OVER 10 YEARS

CITIZEN BASED TAXATION (CBT)

Under the current House proposal the Worldwide Taxation system of the individuals residing abroad would not change. Therefore the Foreign Earned Income Exclusion (FEIE) and Foreign Tax Credit (FTC) remain intact.

HIGHER TAX

A potential increase in tax for taxpayers with children in low-tax or no-tax countries has been suggested. Despite doubling the standard deductions, this group of taxpayers will be negatively affected by elimination of personal exemptions.

CHILD CREDIT

Increased credit from $1,000 to $1,600 per child does not compensate loss of personal exemptions. For qualifying households, child tax credit of $1,000 per child was available in addition to personal exemptions. The increased credit per child of $1,600 now replaces the personal exemption of $4,050 but this credit is only available to those who qualify.

ITEMIZED DEDUCTIONS

Mortgage interest deductions for second homes, unreimbursed employee expenses, medical expenses, state and local tax payments, and loss and casualty deduction. Upon curtailing of itemized deductions the double standard deductions will be a better option for the majority of taxpayers.

Double tax as a Canadian living in the US

As a citizen of Canada living in the US your worldwide income is taxable under the Canadian tax system. It is essential that you are aware of your tax filing obligations as to avoid penalties and paying more tax than you should be.

Lower tax rates

Many countries around the world- such as the US, have a lower individual income tax rate to Canada. Therefore it may be an option to sever your residency ties to Canada for tax purposes, as to not face Canadian tax. You can sever your Canadian residency through a Canadian Departure tax return.

It is important that before you make that decision, you first determine if you are even in a position to be able to sever residency and whether it makes sense in your situation. Tax residency does not affect your citizenship or legal residency status. It is specific to tax.

How to file your taxes?

If you have left Canada you will have to first establish your residency status to work out what your Canadian tax filing obligations are.

You will be required to file a tax return the year you leave Canada if you have a balance owed or you’d like to receive a tax refund. During the tax year you leave, you should complete the general income tax and benefit package for your province or territory of residence on the day you emigrated from Canada. Your tax-filing deadline will remain the same. You will have to file before April 30th, or if you have a business in Canada you will have until June 15th to file your tax return.

On your return you must report your worldwide income earned while you were a Canadian resident. After you are no longer recognised Canadian resident, you will only have to pay income tax on income earned in Canada.

YOU ARE STILL REQUIRED TO FILE A CANADIAN TAX RETURN IF THE TAX RATE OF YOUR LOCATION IS HIGHER

If the tax rate is higher in the country you are living/travelling/working, you are still required to file a Canadian tax return. You will not be required to pay any tax to Canada. However you must still disclose the amount of income you earned and the amount of tax you paid.

Non-residents of Canada are still subject to taxation if they make income within Canada.

Non-residents are still required to pay tax if they earn income in Canada. The income is generally taxed at a flat rate.

Clothing on US States

Requiring retailers to charge sales tax is common amongst many states in the US. Below is a list of states where clothing is taxable.

If you are in need of tax advice regarding your state contact us

Alabama

Arizona

Arkansas

California – Sales tax exemptions allowed for some nonprofits and thrift stores providing clothing to the needy.

Colorado

Connecticut – Clothing and footwear that costs more than $1,000 is subject to the luxury goods tax. (As of July 1, 2015.)

District of Columbia

Florida

Georgia

Hawaii

Idaho – Some exemptions regarding free clothing for charity apply.

Illinois

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

Michigan

Mississippi – Clothing, footwear, and accessories used in motion pictures may be exempt.

Missouri

Nebraska

Nevada

New Mexico

North Carolina

North Dakota

Ohio – Some protective clothing/gear may be tax exempt.

Oklahoma

South Carolina – Some protective clothing/gear may be tax exempt.

South Dakota

Tennessee – Sales tax exemptions allowed for some nonprofits and thrift stores providing used clothing to the needy.

Texas

Utah

Virginia – Some protective clothing/gear may be tax exempt.

Washington

West Virginia

Wisconsin

Wyoming

IN WHICH STATES ARE CLOTHING TAX EXEMPT?

These states do not consider clothing taxable, but many of them include exceptions, so find your state to find out more about the taxability of clothing.

MASSACHUSETTS

Clothing is mostly tax exempt, but exemption is limited to the first $175 of an article of clothing. Certain clothing and footwear designed for athletic activity or protective use are taxable.

MINNESOTA

Clothing is tax exempt, but accessories, most protective equipment, sports and recreational clothing, and fur clothing are taxable.

NEW JERSEY

Clothing is tax exempt, but fur clothing, clothing accessories or equipment, sport or recreational equipment, or protective equipment are taxable. Protective equipment is only exempt when purchased for the daily work of the user and worn as part of a work uniform or work clothing.

NEW YORK

Clothing is tax exempt, but exemption is limited to clothing and footwear costing less than $110 per item or pair. Clothing and footwear costing $110 or more per item or pair are taxable.

PENNSYLVANIA

Clothing is tax exempt, but accessories, fur clothing, ornamental and formal clothing, and sports-related clothing are taxable.

RHODE ISLAND

Clothing is tax exempt, but accessories, protective clothing and athletic clothing are taxable. Effective October 1, 2012, exemption only applies to first $250 of sales price per item of clothing. (Meaning only the amount above $250 is subject to sales tax.)

VERMONT

Clothing is tax exempt, but clothing accessories or equipment, protective equipment, and sports clothing/equipment are taxable.

FOR EXPECT US TAX ADVICE CONTACT US NOW

TAX FOR US PHOTOGRAPHERS

As accountants who have worked with thousands with photographers and on even more US tax returns, we have full empathy of the stress that many incur during tax season. Although we cannot compile our hundreds of hours of knowledge and experience into one article, this post is aimed to outline the basic knowledge photographers need to know when completing their US tax return.

FORMS

As a self-employed photographer you will want the following IRS forms.

1040 FORM

This is the basic tax form that everyone uses and applies for those with very basic tax returns. On a 1040 you’ll list your gross income, your deductions and your basic tax credits.

SCHEDULE C

A schedule C is the basic form that is necessary to complete a self-employment tax return. A schedule C form includes the income you make from photography, as well as any deductions in your business. This is the basic form used for thos who are claiming income from their business.

8829 FORM

An 8829 form is a business use of home form issued by the IRS. If you have used your home as an office or for photography work purposes, you can claim a portion of your rent or mortgage based on the size of your home office.

4562 FORM

A 4562 form is for Depreciation and Amortization paperwork. This form is used to depreciate your equipment and other tools purchased for the year. Each piece of equipment is depreciated at a different amount of years, so you’ll want to check the classification of your equipment to see what rate it depreciates at.

EXPENSES THAT CAN BE CLAIMED INCLUDE:

· Basic Expenses

· Travel Expenses

· Mileage Expenses

· Meal Expenses

· Depreciation

QUARTERLY PAYMENTS

It is not unusual to owe the IRS money if you’re self-employed. This is because those on the PAYE system have Federal and State taxes withheld from their pay cheque; those who are self-employed do not. If you owe multiple years of tax then you could be liable to a penalty. This penalty can be avoided by paying owed taxes quarterly to your state and the IRS. Filing out an estimated tax form, a 1040-ES, can set up quarterly payments.

Are you entitled to Health Coverage Tax Credit?

The Health Coverage Tax Credit is a tax credit that pays 72.5% of qualified health insurance premiums for eligible individuals and their families. The Health Coverage Tax Credit is a partial reimbursement for the premiums paid for on qualified health insurance coverage and can now be claimed for qualified coverage.

Are you eligible?

In order to be eligible to elect the Health Coverage Tax Credit you must be one or more of the following:

An eligible trade adjustment assistance recipient, alternative TAA recipient or reemployment TAA recipient,

An eligible Pension Benefit Guaranty Corporation payee, or

The family member of an eligible TAA, ATAA, or RTAA recipient or PBGC payee who is deceased or who finalized a divorce with you.

You are not eligible for the HCTC if you:

Can be claimed as a dependent on another person’s federal income tax return or

Are enrolled in Medicare, Medicaid, the Children’s Health Insurance Program, or the Federal Employees Health Benefits Program or are eligible to receive benefits under the U.S. military health system (TRICARE)

Qualifying Health Insurance Coverage

The Health Coverage Tax Program doesn’t provide health insurance coverage. You will therefore have to hold qualified health insurance to claim the credit. Individual health insurance plans that are in place for an individual or their family from a insurance company, agent or broker also qualify.

US Tax: Gift from a Foreign Person

As a US citizen who has received foreign gifts of money or other property, you may need to report any gifts your receive from a foreign person on a Form 3520. A Form 3520 is an informative return, not a tax return, because foreign gifts are not subject to income tax. However, there are significant penalties for failure to file a Form 3520 when it is required.

Generally, foreign gifts that a subject to a form 3520 are money or property. A foreign person is regarded as a nonresident alien individual or foreign corporation, partnership or estate.

Qualified tuition or medical payments on behalf of a U.S. citizen are not regarded as gifts by the HMRC and therefore are not subject to be mentioned in a Form 3520.

Who must file a Form 3520?

Those who receive money or other property above the set threshold you must file a Form 3520.

The threshold is currently set at:

· Gifts valued at more than $15,601 from foreign corporations or foreign partnerships

· Gifts and bequests valued at ore than $100,000 from a nonresident alien individual or foreign estate.

Gifts or Bequests from Expats

U.S. citizens and residents that receive suited gifts or bequests from covered expatriates under the IRC 877A may be subject to tax under the new IRC section 2801, which states that there is a transfer tax on U.S. persons who receive gifts or bequests on or after June 17, 2008, from such former U.S. citizens or former U.S. lawful permanent residents.

Penalties for Failure to File Form 3520

You may be penalized if you do not file your Form 3520 on time or if it is incomplete or inaccurate. See the Instructions for Form 3520 for more details on penalties that may be imposed for not timely filing the Form 3520, or if the information is incomplete or incorrect, for failure to report foreign gifts, and/or for undisclosed foreign financial asset understatements

CANADIAN EXPAT TAX ADVICE: CANADIAN TAX-FREE SAVINGS ACCOUNTS: CAN I GET ONE? WHAT AM I ENTITLED TO?

Tax-Free Savings Accounts (TFSA) were introduced to Canada in 2009. This is a way for people who are age 18 and above to set money aside tax-free throughout their lifetime. Contributions to a TFSA are not deductible for income tax purposed. Any amount contributed as well as income earned in the account is generally tax-free, even when it is withdrawn. Administrative or other fees in relation to TFSA and any interest or money borrowed to contribute to a TFSA are not deductible.

WHO CAN OPEN A TAX-FREE SAVINGS ACCOUNT?

Any individual who is 18 or older with a valid social security number is eligible to open a TFSA.

In certain provinces and territories the legal age at which an individual can enter into a contracts, such as TFSA’s, is 19. Therefore some may not be able to open an account until they are 19.

NON-RESIDENTS

If you are become a non-resident of Canada for tax purposes you are able to maintain your TFSA and will not be taxed in Canada on any earnings in the account or on withdrawals from it.

No TFSA contribution room will accrue for any year throughout which you are a non-resident of Canada and any withdrawals made during the period that you are non-resident will be added back to your TFSA contribution room in the following year, but will only be available if you re-establish your Canadian residency status for tax purposes.

You can contribute to a TFSA up to the date that you become a non-resident. The annual TFSA dollar limit is not pro-rated in the year of emigration or immigration.

OPENING A TFSA

To open a TFSA you must contact your financial institution, credit union or insurance company and provide the issuer with your social security number and date of birth. This is so that the issuer can register your qualifying arrangement as a TFSA.

You can be the owner of more than one TFSA, however the total amount you contribute to all of your TFSAs cannot be more than what is available to your contribution room for that year.

TYPES OF TFSAS

There are three types of Tax-Free savings accounts that are currently available:

· A deposit

· An annuity contract

· An arrangement in trust

You can also set up a self-directed TFSA if you would rather build and manage your own investment portfolio by buying and selling different types of investments.

TYPES OF INVESTMENTS ALLOWED

The type of investments that are generally permitted in a TFSA are the same as those permitted in a registered retirement savings plan. This would include:

· Cash

· Mutual funds

· Securities listed on a designated stock exchange

· Guaranteed investment certificates

· Bonds

· Certain shares of small business corporations

Do I need to file a Georgia State tax return?

Your tax filing requirements for Georgia State are determined by your residency status.

Full Residents

As a full resident of Georgia State you are required to file a Georgia State Tax Return if any of the following apply to you:

· You are required to file a Federal Income tax return- As a US Expat this can vary as it can depend on whether you are in a certain income threshold.

· You have income subject to Georgia income tax but not subject to federal income tax

· Your income exceeds Georgia’s standard deduction and personal exemptions

You are required to file a Georgia State Tax return for as long as you are a legal resident of Georgia- even if you are not currently residing in the state.

Part-Year Resident

If you are a legal resident of Georgia for only part of the tax year and are required to file a federal income tax return, you will also be required to file a Georgia Form 500 Individual Income Tax Return. Page 6, Schedule 3 is used to determine the portion of your income that is taxable by Georgia State.

Non-Resident

Nonresidents who work in Georgia or receive income from Georgia sources and and are required to file a Federal Income Ta x return are required to file a Form 500 Individual Income Tax Return.

Examples of Georgia Sources of Income:

· Wages

· Georgia Lottery Winning s

· Income from flow through entities

· Rents

If you are a legal resident of another state, you are not required to file Georgia income tax return to file a Georgia income return if:

· Your only activity for financial gain or profit in Georgia consists of performing services in Georgia for an employer

· The compensation for services performed does not exceed the lesser of 5% of the wages in all places or $5,000.00

US TAX NEWS: TRUMP ANNOUNCES US TAX CHANGES IN INDIANA SPEECH

“SIMPLE, EASY, AND FAIR FOR ALL AMERICANS”

Speaking on Wednesday, President Trump revealed his tax plan, pledging to make taxes “simple, easy, and fair for all Americans”. However, with no suggestion of the plan’s cost being offered, and with seemingly many benefits present for the wealthy but few for lower- and middle-income families, it is possible to question the potential of the plan.

Written by the ‘Big Six’, the plan is based on four main principles, with these being:

Making the tax code simple, fair, and easy to understand;

Giving American workers a pay rise;

Making America the ‘jobs magnet of the world’, by ‘levelling the playing field’ for American businesses and workers;

Bringing back trillions of dollars currently being kept offshore to reinvest in the American economy.

MAKING THE TAX CODE SIMPLE, FAIR, AND EASY TO UNDERSTAND

The first of these principles would chiefly be achieved by reducing the number of income tax brackets from the current number of seven to three, with these being 12%, 25%, and 35%. The current top rate is 39.6%, and the current lowest rate is 10%, though proponents of the plan were keen to note that families who would see their tax rate increased from 10% to 12% were expected to be better off under the new plan due to a larger standard deduction (with this amount having been approximately doubled to $12,000 for single filers, and $24,000 for married couples filing jointly), an increase in child tax credit (being increased from $1000 to a currently undisclosed amount), and other additional reliefs, such as the introduction of a $500 credit for non-child dependants (such as the elderly). The plan also allows the future creation of an additional top rate for highest-income taxpayers, with President Trump claiming, “This reform will protect low-income and middle-income households, not the wealthy and well connected”.

MAKING AMERICA THE 'JOBS MAGNET OF THE WORK', BY 'LEVELLING THE PLAYING FIELD' FOR AMERICAN BUSINESSES AND WORKERS

The third of the plan’s principles will be achieved through the introduction of tax changes for a variety of American businesses, though focused mainly on small- and medium-sized ones, with the President claiming that his reforms “will be the lowest top marginal income rate tax for small and midsize businesses in this country in more than 80 years”. This suggested new maximum top tax rate was revealed to be 25%, and is intended to be placed on small and family-owned businesses (conducted as sole proprietorships, partnerships, and S-corporations), and ‘pass-through’ businesses – which currently account for 95% of all businesses in the US and for a majority of the government’s corporate tax revenue – that are presently taxed art the rate of their owners.

The plan also calls to reduce the rate of corporation tax to 20% from its current rate of 35%. This is below the 22.5% worldwide average, and thus is expected to help make large American companies more competitive with their international counterparts. Large businesses are also expected to benefit from the fourth principle of the plan, under which both the US and foreign profits of US multi-national corporations will be taxed at a reduced rate, in order to prevent profits being taken to tax havens.

WHAT ARE MY US TAX FILING OBLIGATIONS

The Sate of New York requires its citizens to file a state tax return. Citizens are generally required to file a return to the state if they are required to file a dederal return. You can also be required to file a New York State return if you’re a non-resident of New York and you have income from a New York State source.

To determine your filing obligations to New York you must first establish whether you are a resident, non-resident or part-year resident.

RESIDENTS

If you are a resident of the New York State, you must file a Form IT-201, Resident Income Tax Return. This is required if you:

· Have to file a federal return

· You did not have to file a federal return but your federal adjusted gross income plus New York additions was more than $4,000 ($3,100 if you are single and can be claimed as a dependent on another taxpayer’s federal return).

· You want to claim a refund of any New York State, City or Yonkers income taxes withheld from your pay.

· You want to claim any of the refundable carryover credits available.

If you were in New York for only part of the year, you should not file a Form IT-201.

PART-YEAR RESIDENT

If you are a Part-Year Resident of the New York State you must file a Form IT-203, Non-resident and Part-Year Resident Income Return. You are required to do so if:

· You are a part-year resident with any income during your resident period or you had New York Source income during your non-resident period and your New York adjusted gross income Federal amount exceeds your New York standard deductions

· If you want to claim a refund of any New York State, City or Yonkers income taxes withheld from your pay.

· You want to claim any of the refundable or carryover credits available

· You are a part-year resident and you are subject to a separate tax on any lump-sum distribution for your resident period derived from or connected with New York sources.

· You had a net operating loss for New York State personal income tax purposes for the tax year, without having similar net operating loss for federal income tax purposes.

You may have additional filing responsibilities if you are a:

· New York City or Yonkers Part-Year resident

· Yonkers income earner

· Subject to the MCTMT

NON-RESIDENT

If you are a New York State non-resident you must file a Form IT-203, Nonresident and Part-Year Resident Income Tax Return, if you meet the following conditions

You are a nonresident with New York source income and your New York adjusted gross income Federal amountcolumn (Form IT-203, line 31) exceeds your New York standard deduction.

You want to claim a refund of any New York State, New York City, or Yonkers income taxes withheld from your pay.

You want to claim any of the refundable or carryover credits available.

You had a net operating loss for New York State personal income tax purposes for the tax year, without having a similar net operating loss for federal income tax purposes.

You may have additional filing responsibilities if you have Yonkers income, or are subject to the MCTMT.

British Columbia Tax Obligations, Exemptions and Credits

British Columbians were the first Canadians that have to pay provincial income tax. Canadian personal income tax has since grown into a complex, ever changing set of rules that leaves many confused and with penalties.

British Columbia’s filing deadline for provincial taxes falls at the same time as their federal taxes. The deadline for filing taxes is April 30th for those who have a balance owing. If you, your spouse or common-law partner ran a business in during the tax year your filing deadline is June 15th.

For 2016 the tax brackets for British Columbias person income:

– 5.06 per cent tax on the first $38,210 of taxable income – 7.7 per cent on income above $38,210 up to $76,421 – 10.5 per cent on income between $76,421.01 to $87,741 – 12.29 per cent on the amount of taxable income between $87,741.01 to $106,543 – Income over $106,543 will be taxed at a rate of 14.7 per cent

Here are some recently introduced British Columbia tax credits:

Tax credits can change from year to year, given the province’s economy and political climate.

Here are are some new credits for the 2016 tax year.

– Home renovation tax credit for seniors and persons with disabilities Since 2012, seniors have been offered a credit for home renovations that help with mobility and access. The credit has now been extended to people with disabilities.

– Back to school tax credit: parents of school-aged children (aged 4 to 16) can receive a $250 credit to help cover the cost of school supplies.

– B.C. Education Coaching: Teachers and teaching assistants who carry at least 10 unpaid hours of extracurricular coaching activity can receive a $500 credit.

– Farmers’ Food Donation: Designed to encourage farmers to donate agricultural products to registered charities, eligible businesses can receive a credit of 25 per cent of the eligible amount of their gift.

On Feb. 11, the B.C. government announced a proposed tax credit for volunteer firefighters and search-and-rescue crew members. If approved, the credit would be applicable for the 2017 tax year.

There are many other, overlooked tax credits that are available to tax filers in British Columbia, contact us for Canadian expat tax advice or visit Bambridge Accountants | Canada for Canadian tax advice

Bambridge Accountants | Canada

IRS Urges Foreign Financial Institutions Participating in FATCA to Check Their Registrations

The IRS are reminding Foreign Financial Institutions to renew their Foreign Financial agreements where required. The Foreign Financial Institutions will have until 24th October 2017 to renew. Those who fail to renew on time could be removed from the Foreign Financial Institution list by the following month. This will make them subject to a 30% tax on certain U.S. source payments.

All Financial Institutions are advised to login to the IRS site to review the FATCA FFI Registration system FAQs.

The FATCA FFI Registration system has been updated to include the ability for FFIs to renew their agreements with the IRS. Once logged into the registration system, a financial institution can determine whether it must renew its FFI agreement using the link to “Renew FFI Agreement.” The following table provides guidance regarding entities required to renew their FFI agreement is provided below to assist FIs with this determination. Once the determination is made, the system enables an FI to review and edit their registration form as needed. The FI will need to verify and update their registration information and submit to renew their FFI agreement.

he updates to the FATCA Registration system include the addition of Renewal of FFI Agreement fields and information on account home pages and the lead's view of member pages. These fields include:

FI Renewal of Agreement Due Date

Renewal of Agreement Submitted Date

Renewal Status

The system instructions and online help have been updated to include instructions for the Renewal of FFI Agreement. The FATCA Registration User Guide has also been updated to include steps for FIs to renew their FFI agreement.

The update within the registration application includes the removal of the classification of limited FFIs and limited branches. This classification option will no longer be available for new FI applicants or for renewing FIs as the transitional period for the limited FFI and limited branches statuses has expired.

For expert tax advice regarding foreign financial institutions contact us

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